Double Jeopardy

The Obama administration wants others to follow its lead by taxing bank liabilities. The idea of raising revenue while bashing banks may appeal. But smaller countries will find it harder to act alone. Besides, copying the U.S. levy could lead to some banks being taxed twice.

Context News

The United States is encouraging other countries to introduce a tax on banks' liabilities. The Obama administration said on Jan. 14 it would work through the G20 group of leading nations and the Financial Stability Board to encourage other financial centres to take a similar approach.

"We are going to see if we can encourage policymakers in other important financial centres to do something similar," Tim Geithner, the U.S. Treasury Secretary, told the Financial Times.

The International Monetary Fund is studying options for a global financial levy, and is due to present some initial ideas at its spring meetings, due to be held in Washington, DC, in April. On Jan 14, Dominique StraussKahn, the IMF's managing director, said: "I really celebrate this proposal by the U.S. government.